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I have helped hundreds of people successfully navigate from the US to Canada. If you're thinking of moving or retiring to Canada contact me today to chat about your plans.

I can be reached via email at phil@philhogan.com, by phone at 250-661-9417 or through my contact page here.

I look forward to speaking to you soon.

Phil Hogan, CPA, CA, CPA (CO)
Cross-Border Tax and Investment Specialist

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Question

Dear Sir

This year I am eligible to claim a UK state pension for myself and my wife (as a dependent).

Over the last ten years, I have made voluntary contributions to the UK National Insurance, so as to maintain that eligibility for a pension.

How do I offset the total cost of those contributions made to that foreign pension scheme, so as to limit the amount of Canadian income tax that foreign pension might incur?

Regards
XXXXXX

Answer

Hi XXXXXX

The taxes you pay in Canada on the US pension can be offset by any withholding taxes the UK representative withholds e.g. foreign tax credit. However it’s not going to be possible to get a foreign tax credit for the voluntary payments to the government plan. The only way that would be possible would be if you were a short-term resident of the UK and your paid “social taxes” to the UK and never intended to collect a government pension when you left.

Hope that helps and don’t hesitate to give me a call if you need more clarification.

Regards

Phil Hogan, CA
250-661-9417